Refer to Exhibit 21

question 116

Multiple Choice

Refer to Exhibit 21.1.What's the difference in the projected ROEs under the restricted and relaxed policies?

• A) 1.20%
• B) 1.50%
• C) 1.80%
• D) 2.16%
• E) 2.59%

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Definitions:

Total Variable Overhead Variance

The difference between the expected and actual costs of variable overheads in a manufacturing or production process.

Variable Overhead

Costs that vary with the level of production output, such as materials, utilities, and commissions, contrary to fixed overheads.

Total Direct Materials Cost Variance

The difference between the budgeted cost of direct materials and the actual cost incurred for the materials.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to it.